Income tax rate up, exemptions cancelled

MUSCAT: Income tax has been raised from 12 to 15 per cent and previously exempt small firms and industries must now pay tax too, the Ministry of Finance has announced.

A flat rate of three per cent has been introduced by the ministry on all companies under the current tax exemption threshold of OMR30,000 per annum. Those companies will now pay three per cent tax as of the start of the 2017 tax year.

Mining, private schools, hotels, universities and nurseries will no longer be exempt from tax, the latest Royal Decree has ordered.

The announcement, published via the government’s news agency, states that the amendments introduced to the Income Tax Law issued by the Royal Decree No.9/2017 on February 19 aim at addressing the hindrances and challenges that faced the application of the existing tax system.

It also aimed at addressing the developments that have taken place in the past years in the business sector in the Sultanate and enhance the efficiency and effectiveness of the tax system to be in line with global tax practices.